Real Estate Q&A: Buying a cabin on Grand Mesa
YOUR JOURNEY HOME
Free Press Real Estate Columnist
Q. Our family is considering buying a cabin on the Grand Mesa. We have been told that some of the cabins are land-lease agreements in which the owners own the cabin itself, however have 99-year leases on the land. What are the risks and/or benefits to that type of arrangement? If you own and eventually sell, does the lease transfer? Any other advice if we are looking to purchase vacation property on the Grand Mesa?
A. Let me start by saying, I based my research on assumptions made from the question above. My primary source for information was the cabin administrator for the Grand Valley Ranger District of the Grand Mesa, Uncompahgre and Gunnison National Forests.
First off, of the hundreds of recreational cabins on Grand Mesa, only 39 sit on USFS permit-governed land. There are many businesses that operate on USFS land, some of those having anywhere from a few to dozens of recreational cabins.
The 39 cabins on USFS land that individual citizens or families may own are clustered in two tracts: Six near the end of Island Lake and 33 in the Sunset Lakes – Mesa Lakes area. The USFS land these cabins sit on is typically quite small for each “recreation residence cabin,” as the USFS refers to them. The land parcels are typically .1 to .25 acres for each cabin.
Many, if not most, of the structures on Grand Mesa are actually on various sized parcels of privately owned land. For those, purchase and sale would be very much the same process as buying a house in the towns of Mesa or Cedaredge, on the flanks of the Grand Mesa.
The 99-year lease idea came as a surprise to the USFS employee I spoke with, and the 20-year renewable land-use permit he told me about took me equally surprised. The annual payment on that permit is determined by appraised value of the parcel and that appraisal is performed once every 10 years on sample properties; it’s not individually on each of the lots or parcels. These permits are not free. They vary with the appraised value of each parcel and fall in the general range of $2,000 per year paid to the USFS.
In the 1930s and 40s, the forest was managed primarily for timber harvest. The government, to encourage private recreational use of the land, established these two tracts where private citizens could obtain a permit and build a cabin. Then, the cabin owner needed to renew that permit every 20 years; a process that continues to this day.
If you were to purchase one of these 39 privately built and occupied cabins, you and the seller would need to work cooperatively with the USFS to transfer the permit. That process includes showing a notarized bill of sale for the structure and the seller completing a Permit Relinquishment form. The forester I spoke with was not aware of any permit that had not been duly transferred upon sale.
With only 39 cabins on public land I was curious to know how often they transfer. Like with any real estate, the answer was “it depends” — on the state of the general economy, how much family members do or do not want to keep the cabin “in the family” and a variety of other possible factors. Some years none of the cabins and permits transfer, and other years there may be a wave of sales and permit transfers.
Similar to a home owners association in Grand Junction, or Denver for that matter, there is an Operations Maintenance Plan; a document that amounts to covenants for each tract. These provide guidelines about paint colors, maintaining design standards, setbacks and other subdivision-like requirements.
The USFS does not provide any infrastructure with the land. Water in Sunset Lakes is available for all the cabins from a shared spring water source while at least some residents of Island Lakes have wells for drinking water. Sewage disposal is governed by the county each tract is located within and is, like the source of water, not the business of the USFS, I was told.
Parting advice from the USFS administrator — if you are buying a private cabin on private land, pursue rigorous due diligence to learn everything possible. If you want to buy a cabin in one of the two USFS tracts, call the cabin administrator before signing any documents for a recap of the information here and a lot more pertinent details.
Doug Van Etten is a local Realtor with Cherry Creek Properties, a Colorado-wide realty firm that recently opened a Grand Junction office. Van Etten has been helping home buyers, sellers and investors accomplish their real estate goals since 1992. To contact him, email DouglasVanEtten@gmail.com.
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